COMMUNITIES AND LOCAL GOVERNMENT

Local Government Finance Settlement 2007-08

Phil Woolas: I have today laid before the House two reports.
	The first is the Local Government Finance Report (England) 2007-08. This report establishes the amounts of revenue support grant (RSG) and non-domestic rates (NDR) to be paid to local authorities in 2007-08, and the basis of their distribution. A draft of this report was issued for consultation on 28 November 2006.
	The second report is the Limitation of Council Tax and Precepts (Alternative Notional Amounts) Report (England) 2007-08. This sets out the Alternative Notional Amounts for Devon and Somerset Fire and Rescue Authority—the combined authority—and Somerset County Council only and is made to reflect the creation of the combined authority by the Devon and Somerset Fire and Rescue Authority (Combination Scheme) Order 2006. It gives the 2006-07 budget requirement figures for these authorities that the Government will use when considering using their capping powers. A draft of this report was issued for consultation on 28 November 2006.
	Communities and Local Government received a total of 169 written representations within the consultation deadlines from the Local Government Association and London Councils, from local authorities, local authority groups and hon. Members. Ministers also met with delegations from London Councils and Special Interest Groups representing the different types of local authority in England, to discuss the proposals.
	Having considered the views of the local authority associations and others who have commented on the provisional settlement, I have decided to confirm my proposals on the basis of distribution for 2007-08 and on the alternative notional amounts as regards the financial year beginning 1 April 2006.
	The final figures published today for 2007-08 confirm those originally published with the 2006-07 settlement in January 2006. In line with Government's policy on multi-year settlements, it has always been clear that the settlement for 2007/08—as the second year of a multi-year settlement—would not be changed from that previously published other than in exceptional circumstances. Having fully considered all the representations received during consultation I have not found such exceptional circumstances.
	This settlement represents a continued real-terms increase in investment in local government, which will allow authorities to continue to deliver improving services at an affordable cost. We have provided formula grant over and above previous plans of £508 million. As a result, total formula grant for 2007-08 will be 3.7 per cent. higher than in 2006-07.
	Specific grants, such as the Dedicated Schools Grant, are on top of these figures and bring the total increase in funding for local authorities to 4.9 per cent. in 2007-08. This brings the total increase in money from Government to local councils, including schools, to 39 per cent. in real terms from 1997 to 2007-08.
	Given this substantial investment in local government, there is no excuse for excessive council tax increases. As in previous years, we are prepared to take capping action to deal with excessive increases. No authority should be complacent about the Government's resolve in this matter—this includes requiring authorities to rebill if that proves necessary.
	I shall be sending copies of these reports to all local authorities in England, and making available full supporting information on the Communities and Local Government website at http://www.local.communities.gov.uk/finance/0708/grant.htm.
	Copies of the reports and related tables showing each authority's allocation of formula grant and other supporting material have been placed in the Vote Office and the Libraries of both Houses.

Disabled Facilities Grant

Yvette Cooper: I would like to make the following statement with regard to the progress of the Government's review of the Disabled Facilities Grant (DFG) programme, which is the responsibility of my Department. This is an inter-departmental review being conducted jointly between the Department for Communities and Local Government, the Department of Health, the Department for Work and Pensions, The Office for Disability Issues and the Department for Education and Skills.
	We are today publishing an inter-departmental consultation paper setting out the Government's proposals for improving delivery of this important programme.
	Entitlement to a DFG is mandatory for eligible disabled people across all housing tenures. The grant provides financial assistance for the provision of a wide range of housing adaptations ranging from stairlifts, level access showers and home extensions. The programme is therefore important in contributing towards several key Government objectives of providing increased levels of care and support to people in their own homes. In particular the Department of Health, working with other Departments, is now leading on the 13 pilot programmes for individual budgets and DFG is one of the funding streams included in this work.
	The DCLG budget for the programme is £120 million per annum but local authorities must provide some of the finance from their own resources. Total public sector spending on the programme is in excess of £200 million per annum.
	Despite the undoubted success of the DFG programme in promoting care and independence at home, it has been the subject of much criticism because of excessive bureaucracy and long delays in delivery. The mandatory nature of the grant, combined with increasing numbers of elderly people and larger numbers of disabled children, means that demand remains strong and is growing fast.
	We therefore commissioned an independent review of the DFG system by Bristol University, which was published in October 2005 and made a large number of recommendations for change. The Government responded by agreeing to one of the key recommendations immediately—to exempt applications with respect to disabled children from the DFG means test. This was implemented from January 2006. Ministers also said they would respond to the other recommendations in the Bristol report by publishing a comprehensive consultation paper with proposals for change.
	The consultation paper sets out a wide range of proposals. Some of the changes can be brought in quickly but there are also some longer-term proposals aimed at achieving a closer integration with social care programmes.
	The key short-term changes are designed to broaden the reach of the grant and to simplify and improve delivery. They include proposals to widen the ring fence for the DCLG grant to local authorities that support the DFG programme. This change will first be trialled in 2007-08 for those authorities involved with the individual budget pilots. This will give them greater flexibility on how they use this resource as part of a comprehensive housing adaptations package.
	There is also a proposal to raise the maximum limit on a DFG from £25,000. This will initially be to £30,000 but with the possibility of going further. We are linking this proposal to a further change which would allow local authorities to seek (part) repayment of a DFG when the property which has been adapted is sold on in certain specified cases. A number of options on how this might work are proposed but in every case the first £5,000 of grant awarded would be exempt from this charge. The charge could of course only be applied to owner-occupied properties and grants awarded to disabled children would be exempt. The expected revenue stream from this would finance the increase in the grant limit to £30,000 and thereafter govern how fast we could move to the £50,000 limit recommended by the Bristol report.
	There is also a proposal to widen the range of purposes for which DFGs can be provided and in particular to clarify that they can be used to ensure a disabled person has access to the garden and other outside spaces.
	We are also proposing new guidance to Regional Assemblies, local authorities and housing associations to encourage them to develop clearer strategies and local agreements to deliver an effective housing adaptations service. In relation to DFG applications from housing association tenants we are proposing clearer guidance on where the financial responsibility lies for providing appropriate support.
	We are also consulting on options to improve targeting of the grant by amending the means test, particularly in respect of providing more help to families with a small earned income or where there is a large mortgage commitment. Views are being invited on which of the options would be most beneficial and help those most urgently in need of assistance, bearing in mind that resources are limited.
	We are also proposing to explore ways of simplifying and speeding up the application process and we will be discussing this with the Local Government Associations. We also want to provide more support to vulnerable households to help them maintain independent living by using Home Improvement Agencies more intensively as support and delivery agents.
	In the long term the future of DFG will also be informed by the outcome of the Individual Budget pilots. These are an attempt to bring together six different funding schemes, including adult social care, community equipment and housing adaptations, to operate a much more integrated service for older and disabled people. The Government are committed to piloting this concept in 13 areas over the next two years and if these are successful to roll them out across the country by 2010. This would mean a fundamental change for DFG as it would be re-integrated as part of a wider social care package. As part of this move towards greater integration and improved delivery we are continuing to discuss with the Department of Health the scope for the provision of stair lifts to be moved from the DFG programme and into the Community Equipment Service.
	In the meantime the consultation paper sets out a range of proposals to improve delivery of this important programme, which will be rebadged as the Accessible Homes Grant, to ensure that help is delivered fairly, swiftly and efficiently to the many families with a disabled person who are in urgent need of support.
	I am also announcing today how the £126 million of grant from my Department to support the DFG programme in 2007-08 will be allocated to local authorities. Details of the amount awarded to each authority are available on the DCLG website at: http://www.communities.gov.uk/index.asp?id=l502662.
	Copies of the grant allocations and consultation papers have been placed in the Libraries of both Houses.

HOME DEPARTMENT

Police Grant Report 2007-08

Tony McNulty: I have today placed in the Library a copy of the Police Grant Report (England and Wales) 2007-08 (HC 207). The report sets out my determination for 2007-08 of the aggregate amount of grants that I propose to pay under section 46(2) of the Police Act 1996, and the amount to be paid to the Greater London authority for the Metropolitan Police Authority.
	General grant allocations, which include Home Office police grant and revenue support grant from the Department for Communities and Local Government and Welsh Assembly Government, for each police authority for 2007-08 are set out in the table.
	
		
			 General Police Grant Allocations for English and Welsh Police Authorities 2007-08 
			 Police Authority 2006-07 Formula Allocation(1) 2007-08 Formula Allocation(1) Change on 2006-07 Formula Allocation 
			  £m £m % 
			 English Shire Forces 
			 Avon and Somerset 161.8 167.9 3.8% 
			 Bedfordshire 64.0 66.4 3.7% 
			 Cambridgeshire 73.8 76.5 3.7% 
			 Cheshire 110.8 114.8 3.6% 
			 Cleveland 89.8 93.0 3.6% 
			 Cumbria 61.8 64.0 3.6% 
			 Derbyshire 102.0 105.8 3.7% 
			 Devon and Cornwall 171.4 177.5 3.6% 
			 Dorset 60.0 62.2 3.6% 
			 Durham 84.0 87.0 3.6% 
			 Essex 162.6 168.5 3.6% 
			 Gloucestershire 54.5 56.5 3.6% 
			 Hampshire 190.4 197.3 3.6% 
			 Hertfordshire 110.4 114.4 3.7% 
			 Humberside 117.8 122.0 3.6% 
			 Kent 176.2 182.6 3.6% 
			 Lancashire 187.0 193.7 3.6% 
			 Leicestershire 107.5 111.5 3.7% 
			 Lincolnshire 58.3 60.5 3.7% 
			 Norfolk 80.5 83.4 3.6% 
			 North Yorkshire 70.5 73.0 3.6% 
			 Northamptonshire 69.2 71.7 3.6% 
			 Nottinghamshire 127.8 132.5 3.7% 
			 Staffordshire 110.3 114.3 3.6% 
			 Suffolk 65.2 67.6 3.6% 
			 Surrey 93.6 97.0 3.6% 
			 Sussex 156.1 161.7 3.6% 
			 Thames Valley 217.9 225.9 3.7% 
			 Warwickshire 49.7 51.5 3.7% 
			 West Mercia 112.0 116.0 3.6% 
			 Wiltshire 59.9 62.0 3.6% 
			 Shires Total 3356.6 3478.6 3.6% 
			 English Metropolitan Forces 
			 Greater Manchester 417.4 432.7 3.7% 
			 Merseyside 245.0 253.8 3.6% 
			 Northumbria 229.7 238.0 3.6% 
			 South Yorkshire 187.5 194.3 3.6% 
			 West Midlands 433.6 450.2 3.8% 
			 West Yorkshire 306.2 317.6 3.7% 
			 Mets Total 1819.4 1886.5 3.7% 
			 London Forces 
			 GLA — Police 1818.3 1883.7 3.6% 
			 City of London(2) 21.8 22.8 N/A 
			 London Total 1840.1 1906.5 N/A 
			 English Total 7016.1 7271.6 3.6% 
			 Welsh Forces 
			 Dyfed-Powys(3) 50.0 51.8 3.6% 
			 Gwent(3) 75.9 78.7 3.6% 
			 North Wales(3) 73.7 76.3 3.6% 
			 South Wales(3) 166.1 172.2 3.6% 
			 Welsh Total 365.7 379.0 3.6% 
			 Total 7381.8 7650.6 3.6% 
			 (1). Rounded to the nearest £100,000. Grant as calculated under the Local Government Finance Report (England) and Local Government Finance (Police) Report (Wales). This includes the Metropolitan Police special payment, and the effects of floors. 
			 (2). Figures for the City of London relate to Home Office Grant only as calculated in the Police Grant Report (England and Wales). Revenue Support Grant is allocated to the Common Council of the City of London as a whole in respect of all its functions. The City is grouped with education authorities for the purposes of floors. 
			 (3). Welsh figures include Home Office floor funding (£12.9 million). Grant provision under the principal formula for police authorities in Wales is varied to ensure that South Wales Police Authority will receive in principal formula and local authority general grants the same increase as that applicable to police authorities in England. A sum equal to the reduction for South Wales is allocated to Dyfed Powys, Gwent and North Wales Police Authorities.

PRIME MINISTER

Committee on Standards in Public Life (11th Report)

Tony Blair: The 11th report of the Committee on Standards in Public Life, "Review of the Electoral Commission" (Cm 7006) has been published by the Committee today. I have laid the report before the House and copies of the report have been placed in the Libraries of both Houses.

WORK AND PENSIONS

Pensions Transfer Values

James Purnell: Last year we consulted on approaches to the calculation of pensions transfer values.
	Members of defined benefit occupational pension schemes are usually best served by leaving their pension rights in the scheme when they change employment. Transfers are an option that members can exercise. But transfers should not jeopardise the success or sustainability of the pension scheme.
	The great majority of respondents to the consultation favoured an approach to the calculation of pensions transfer values based on the expected cost to the scheme of providing the alternative deferred pension benefits. This approach is consistent with what happens now. It is also an approach which does not affect the ongoing viability of the scheme. The Government therefore intend to regulate on this basis.
	The regulations will also provide that:
	the trustees of the pension scheme will be responsible for the determination of the actuarial assumptions used to calculate transfer values. They will be required to seek the advice of the actuary. This is consistent with the framework of responsibilities under the rules on scheme funding;
	the trustees will be required to determine the assumptions in the calculation of transfer values on a best estimate basis;
	the trustees will be required to use a discount rate in the calculation of transfer values which reflects a best estimate of future returns, having regard to the existing asset mix of their scheme;
	the trustees will continue to be able to reduce transfer values where the scheme is underfunded;
	the trustees will be allowed to deduct any reasonable administrative costs incurred from the transfer value;
	the trustees will have to provide members considering whether to transfer with more information.
	These arrangements will apply to private sector pension schemes.
	Public service pension schemes are different in a number of ways from funded private sector schemes. The Government are still considering arrangements for these schemes and hope to make an announcement soon.
	The Government's formal response to the consultation is being published today. We intend to bring all of these new arrangements into effect in April 2008.